KARACHI: The Federal Board of Revenue (FBR) has permitted export-oriented units (EOU) to divest or transfer plant and machinery to another exporter.
This kind of equipment is subject to concessions or exemption under the export-oriented Small and Medium Enterprises Rules 2008, reported The News.
However, before the government had disallowed transfer or resale of such duty exempted plant and machinery.
Customs officials on Monday revealed imported plant and machinery would remain subject to duty concessions even after a change in ownership from one export unit to another under revised rules.
According to officials, the FBR revised customs law to permit collectors of customs for transfer and sale of plant, machinery, equipment and apparatus from one EOU to another one.
The manufacturer deposits a security with Customs for the import of machinery at discounted rates.
A customs official stated, “Any sale or transfer shall be subject to replacement of security and indemnity bond for the remaining period for which the earlier security was submitted.”
The tax regulator also revised rule linked to the disposal of goods in the domestic market by the EOUs.
As per the revised rules, domestic sale of good may be permitted contingent on payment of duties and taxes relevant at the time of import alongside payment of surcharge against Karachi interbank offered rate (KIBOR) plus 3 percent annum to be determined from import date of input goods.
But the tax regulator made it clear, the number of input goods for domestic sale couldn’t cross 10 percent of total imports per annum.
Also, the FBR has implemented a penalty if there is a shortfall in export limit under the concessionary regime.
The FBR will retrieve duty and taxes to extent of input goods if the export shortfall is up to five percent, revealed customs officials.
They shared if the export deficit was over 10 percent, then surcharge amount would be recoverable at KIBOR plus 5 percent alongside other applicable charges.
